The merger, announced in 2022, aimed to combine the fifth and tenth largest retailers in the country, with the potential to significantly impact the grocery industry.

The FTC alleges that the merger could result in higher prices for consumers, particularly as food prices have surged, with Americans now spending 26% more on groceries since 2020. The commission expressed concerns that the elimination of competition in the grocery market could lead to increased costs, store closures, and job losses.

Kroger and Albertsons, which both employ mostly unionized workforces, sought to merge to improve competitiveness against non-union giants like Walmart, Amazon, and Costco, as well as address the growing pressure from Aldi, the German discount supermarket chain.

The two companies had proposed using $500 million in cost savings from the merger to reduce prices for shoppers and offer tailored promotions and savings. However, the FTC remained skeptical of this claim and raised doubts about the potential benefits for consumers.

To address antitrust concerns related to overlapping stores, Kroger and Albertsons planned to sell around 400 stores to C&S Wholesale Grocers, owner of Piggly Wiggly and other brands, with a provision to sell more than 200 additional stores pending regulatory approval. The merger had faced opposition from unions, small grocers, and bipartisan groups in Congress, who feared the deal would harm competition, leading to increased prices and job losses.

FTC Chair Lina Khan, known for her skepticism towards divestitures as a means to promote competition, highlighted the challenges faced in a previous deal involving Albertsons and Safeway. The approval of the divestiture to Haggen, a small supermarket chain, ended in bankruptcy and store closures, underscoring the limitations of such measures.

Khan's tenure at the FTC has seen the agency take significant steps in addressing antitrust issues, including launching landmark suits against tech giants like Amazon. The ongoing legal battle over the Kroger and Albertsons merger reflects broader concerns around competition, pricing, and consumer welfare in the grocery industry.